1.1 	A bill for an act
1.2 	relating to property taxation; providing for a limit
1.3 	on homestead property taxes based on the income of the
1.4 	homeowner; amending Minnesota Statutes 2004, sections
1.5 	290A.03, subdivision 13; 290A.04, subdivisions 1, 2;
1.6 	290A.23, subdivision 3; repealing Minnesota Statutes
1.7 	2004, sections 273.1384, subdivision 1; 290A.04,
1.8 	subdivision 2h.
1.9 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.10 	Section 1. Minnesota Statutes 2004, section 290A.03,
1.11 	subdivision 13, is amended to read:
1.12 		Subd. 13.Property taxes payable.  "Property taxes
1.13 	payable" means the property tax exclusive of special
1.14 	assessments, penalties, and interest payable on a claimant's
1.15 	homestead after deductions made under sections 273.135,
1.16 	273.1384, 273.1391, 273.42, subdivision 2, and any other state
1.17 	paid property tax credits in any calendar year, ~~and after any~~
1.18 	~~refund claimed and allowable under section 290A.04, subdivision~~
1.19 	~~2h,~~that is first payable in the year that the property tax is
1.20 	payable.  In the case of a claimant who makes ground lease
1.21 	payments, "property taxes payable" includes the amount of the
1.22 	payments directly attributable to the property taxes assessed
1.23 	against the parcel on which the house is located.  No
1.24 	apportionment or reduction of the "property taxes payable" shall
1.25 	be required for the use of a portion of the claimant's homestead
1.26 	for a business purpose if the claimant does not deduct any
1.27 	business depreciation expenses for the use of a portion of the
2.1 	homestead in the determination of federal adjusted gross
2.2 	income.  For homesteads which are manufactured homes as defined
2.3 	in section 273.125, subdivision 8, and for homesteads which are
2.4 	park trailers taxed as manufactured homes under section 168.012,
2.5 	subdivision 9, "property taxes payable" shall also include 19
2.6 	percent of the gross rent paid in the preceding year for the
2.7 	site on which the homestead is located.  When a homestead is
2.8 	owned by two or more persons as joint tenants or tenants in
2.9 	common, such tenants shall determine between them which tenant
2.10 	may claim the property taxes payable on the homestead.  If they
2.11 	are unable to agree, the matter shall be referred to the
2.12 	commissioner of revenue whose decision shall be final.  Property
2.13 	taxes are considered payable in the year prescribed by law for
2.14 	payment of the taxes.
2.15 	In the case of a claim relating to "property taxes
2.16 	payable," the claimant must have owned and occupied the
2.17 	homestead on January 2 of the year in which the tax is payable
2.18 	and (i) the property must have been classified as homestead
2.19 	property pursuant to section 273.124, on or before December 15
2.20 	of the assessment year to which the "property taxes payable"
2.21 	relate; or (ii) the claimant must provide documentation from the
2.22 	local assessor that application for homestead classification has
2.23 	been made on or before December 15 of the year in which the
2.24 	"property taxes payable" were payable and that the assessor has
2.25 	approved the application.
2.26 	
EFFECTIVE DATE. This section is effective for claims
2.27 	filed in 2006 and thereafter based on property taxes payable in
2.28 	2006 and thereafter.

2.29 	Sec. 2. Minnesota Statutes 2004, section 290A.04,
2.30 	subdivision 1, is amended to read:
2.31 		Subdivision 1.Refund.  A refund shall be allowed each
2.32 	qualifying claimant ~~in the amount that~~ based on the relationship
2.33 	between property taxes payable or rent constituting property
2.34 	taxes ~~exceed the percentage of~~ and the household income of the
2.35 	claimant ~~specified in subdivision 2 or 2a~~ in the year for which
2.36 	the taxes were levied or in the year in which the rent was paid
3.1 	as specified in subdivision 2 or 2a. ~~If the amount of property~~
3.2 	~~taxes payable or rent constituting property taxes is equal to or~~
3.3 	~~less than the percentage of the household income of the claimant~~
3.4 	~~specified in subdivision 2 or 2a in the year for which the taxes~~
3.5 	~~were levied or in the year in which the rent was paid, the~~
3.6 	~~claimant shall not be eligible for a state refund pursuant to~~
3.7 	~~this section.~~
3.8 	
EFFECTIVE DATE. This section is effective for claims
3.9 	filed in 2006 and thereafter based on property taxes payable in
3.10 	2006 and thereafter.

3.11 	Sec. 3. Minnesota Statutes 2004, section 290A.04,
3.12 	subdivision 2, is amended to read:
3.13 		Subd. 2.Homeowners. (a) A claimant whose property taxes
3.14 	payable are in excess of the percentage of the household income
3.15 	stated below shall pay an amount equal to the percent of income
3.16 	shown for the appropriate household income level along with the
3.17 	percent to be paid by the claimant of the remaining amount of
3.18 	property taxes payable.  The state refund under this paragraph 
3.19 	equals the amount of property taxes payable that remain, up to
3.20 	the maximum state refund amount shown below.
3.21 	Percent           Percent    Maximum
3.22 	Household Income     of Income          Paid by     State
3.23 	                                        Claimant    Refund
3.24 	    $0 to 1,189     1.0 percent        15 percent   $1,450
3.25 	 1,190 to 2,379     1.1 percent        15 percent   $1,450
3.26 	 2,380 to 3,589     1.2 percent        15 percent   $1,410
3.27 	 3,590 to 4,789     1.3 percent        20 percent   $1,410
3.28 	 4,790 to 5,979     1.4 percent        20 percent   $1,360
3.29 	 5,980 to 8,369     1.5 percent        20 percent   $1,360
3.30 	 8,370 to 9,559     1.6 percent        25 percent   $1,310
3.31 	 9,560 to 10,759    1.7 percent        25 percent   $1,310
3.32 	10,760 to 11,949    1.8 percent        25 percent   $1,260
3.33 	11,950 to 13,139    1.9 percent        30 percent   $1,260
3.34 	13,140 to 14,349    2.0 percent        30 percent   $1,210
3.35 	14,350 to 16,739    2.1 percent        30 percent   $1,210
3.36 	16,740 to 17,929    2.2 percent        35 percent   $1,160
3.37 	17,930 to 19,119    2.3 percent        35 percent   $1,160
3.38 	19,120 to 20,319    2.4 percent        35 percent   $1,110
3.39 	20,320 to 25,099    2.5 percent        40 percent   $1,110
3.40 	25,100 to 28,679    2.6 percent        40 percent   $1,070
3.41 	28,680 to 35,849    2.7 percent        40 percent   $1,070
3.42 	35,850 to 41,819    2.8 percent        45 percent   $970
3.43 	41,820 to 47,799    3.0 percent        45 percent   $970
3.44 	47,800 to 53,779    3.2 percent        45 percent   $870
3.45 	53,780 to 59,749    3.5 percent        50 percent   $780
3.46 	59,750 to 65,729    4.0 percent        50 percent   $680
3.47 	65,730 to 69,319    4.0 percent        50 percent   $580
3.48 	69,320 to 71,719    4.0 percent        50 percent   $480
3.49 	71,720 to 74,619    4.0 percent        50 percent   $390
3.50 	74,620 to 77,519    4.0 percent        50 percent   $290
4.1 	~~The payment made to a claimant shall be the amount of the~~
4.2 	~~state refund calculated under this subdivision.~~No ~~payment~~ 
4.3 	refund is allowed under this paragraph if the claimant's
4.4 	household income is $77,520 or more.
4.5 	(b) A claimant shall be eligible for a refund equal to the
4.6 	amount that the claimant's property taxes payable, net of any
4.7 	refund determined under paragraph (a), exceed four percent of
4.8 	household income.
4.9 	(c) A claimant's property tax refund shall be the sum of
4.10 	the refund amount determined under paragraph (a) and the refund
4.11 	amount determined under paragraph (b).
4.12 	
EFFECTIVE DATE. This section is effective for claims
4.13 	filed in 2006 and thereafter based on property taxes payable in
4.14 	2006 and thereafter.

4.15 	Sec. 4. Minnesota Statutes 2004, section 290A.23,
4.16 	subdivision 3, is amended to read:
4.17 		Subd. 3.Annual appropriation. ~~For payments made after~~
4.18 	~~July 1, 1996,~~There is annually appropriated from the general
4.19 	fund to the commissioner of revenue the amount necessary to make
4.20 	the payments required under section 290A.04,
4.21 	~~subdivisions~~ subdivision 2 ~~and 2h~~.
4.22 	
EFFECTIVE DATE. This section is effective for claims
4.23 	filed in 2006 and thereafter based on property taxes payable in
4.24 	2006 and thereafter.

4.25 	Sec. 5. REPEALER.
 4.26 	(a) Minnesota Statutes 2004, section 273.1384, subdivision
4.27 	1, is repealed.
4.28 	(b) Minnesota Statutes 2004, section 290A.04, subdivision
4.29 	2h, is repealed.

4.30 	EFFECTIVE DATE. Paragraph (a) of this section is
4.31 	effective for property taxes payable in 2006 and thereafter.
4.32 	Paragraph (b) of this section is effective for claims based on
4.33 	taxes payable in 2006 and thereafter.